NewsIPOINDO SMC IPO Analysis: ₹77.71 Crore Issue by Electrical Equipment Manufacturer Opens January 13INDO SMC IPO Analysis: ₹77.71 Crore Issue by Electrical Equipment Manufacturer Opens January 13
INDO SMC launches ₹77.71 crore IPO on January 13-15, 2026, for electrical equipment manufacturing expansion. The company achieved remarkable 430.84% revenue CAGR from FY2023-FY2025, growing from ₹7.30 crore to ₹138.69 crore, with strong order book of ₹28,319.25 lakhs. However, persistent negative operating cash flows, high customer concentration (82.94% from top 10 customers), and capacity under-utilization present significant risks. IPO proceeds will fund ₹25.71 crore capex and ₹52.00 crore working capital requirements.
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INDO SMC, an electrical equipment manufacturer founded in 2021, is set to launch its initial public offering worth ₹77.71 crore, opening on January 13, 2026, and closing on January 15, 2026. The company operates four manufacturing facilities across Gujarat, Maharashtra, and Rajasthan, specializing in electrical components including energy meter enclosures, transformers, and distribution equipment.
Company Operations and Product Portfolio
INDO SMC holds ISO 9001:2015 certification and manufactures products using sheet moulding compounds (SMC), fiberglass reinforced plastic (FRP), copper, mild steel, and stainless steel. The company's diverse product range includes enclosure boxes for energy meters, high tension and low tension current transformers, distribution boxes and panels, FRP grating, junction boxes, feeder pillars, and power distribution switchgears. As of November 30, 2025, the company maintains a robust order book valued at ₹28,319.25 lakhs.
Financial Performance Analysis
The company has demonstrated exceptional revenue growth over the past three years:
| Period | Revenue (₹ Crore) | Growth Rate | PAT (₹ Crore) | PAT Margin |
|---|---|---|---|---|
| FY2023 | 7.30 | - | 0.46 | 6.30% |
| FY2024 | 28.03 | 284.11% | 3.00 | 10.70% |
| FY2025 | 138.69 | 394.79% | 15.44 | 11.13% |
| Q2 FY2026 | 112.54 | - | 11.46 | 10.18% |
The revenue compound annual growth rate (CAGR) from FY2023 to FY2025 stands at 430.84%, while profit after tax grew at 843.48% CAGR during the same period. Total assets expanded from ₹13.85 crore in FY2023 to ₹147.67 crore in Q2 FY2026.
IPO Structure and Fund Utilization
The public issue comprises entirely of fresh shares worth ₹77.71 crore with no offer for sale component. The company plans to utilize the proceeds strategically:
| Purpose | Amount (₹ Crore) | Details |
|---|---|---|
| Capital Expenditure | 25.71 | Plant and machinery for three units |
| Working Capital | 52.00 | Inventory and operational requirements |
| General Corporate | Balance | Not exceeding 15% of issue size |
The capital expenditure will support expansion across facilities in Pirana Ahmedabad, Ghiloth Rajasthan, and Nashik Maharashtra, including introduction of new products such as SMC windows, metro train covers, and defense bunkers.
Key Business Strengths
INDO SMC's competitive advantages include its diverse product portfolio leveraging SMC technology across multiple applications, advanced manufacturing capabilities with state-of-the-art machinery, and experienced management team with over 20 years of industry expertise. The company's ISO certification ensures stringent quality standards, while established customer relationships are evidenced by the substantial order book.
Risk Factors and Challenges
Despite strong growth, the company faces several operational challenges. Raw material costs represent a significant portion of revenue, ranging from 71.32% in FY2025 to 106.36% in FY2023, with no long-term supply agreements in place. Customer concentration remains high, with the top 10 customers accounting for 82.94% of total revenue in Q2 FY2026.
The company has consistently reported negative operating cash flows:
| Period | Operating Cash Flow (₹ Crore) |
|---|---|
| FY2023 | -2.90 |
| FY2024 | -5.78 |
| FY2025 | -13.70 |
| Q2 FY2026 | -7.05 |
Additional concerns include manufacturing capacity under-utilization, which declined from 65.72% in FY2023 to 34.70% for Q2 FY2026 for SMC products, and high financial leverage with total borrowings of ₹49.35 crore as of September 30, 2025.
Investment Considerations
The IPO presents a mixed investment proposition combining exceptional growth potential with operational challenges. While the company's revenue trajectory and order book provide positive indicators, investors should carefully evaluate the persistent negative cash flows, customer concentration risks, and capacity utilization issues. The electrical equipment sector exposure and experienced management team offer potential upside, but the high-risk profile requires thorough due diligence from prospective investors.
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